Strategic Cost Control Practices and Organizational Competitive Positioning

Abstract

This research investigates the relationship between strategic cost control practices
and organizational competitive positioning, proposing a novel framework that integrates principles from cybernetics, complex adaptive systems, and behavioral economics into traditional management accounting. While conventional studies treat cost
control as a reactive, operational function, this paper re-conceptualizes it as a dynamic,
anticipatory system capable of shaping competitive advantage. We develop a methodology based on agent-based modeling and simulation to analyze how different cost control strategies—categorized as adaptive, predictive, and transformative—influence an
organization’s ability to secure and maintain competitive positions in volatile markets.
Our simulation environment models a competitive landscape of 50 heterogeneous firms
over 1,000 operational cycles, incorporating stochastic demand shocks, technological
disruptions, and strategic interactions. The results demonstrate that transformative
cost control practices, characterized by real-time feedback loops, decentralized decision
rights, and investment in strategic cost intelligence, correlate strongly with superior and
more resilient competitive positioning, particularly in high-velocity industries. Conversely, rigid, accounting-centric control systems are associated with positional erosion
under conditions of turbulence. The study’s primary contribution is the Strategic Cost
Positioning (SCP) framework, which provides a diagnostic tool for managers to align
cost management with strategic intent. This research bridges a significant gap between
strategic management theory and cost accounting practice, offering a forward-looking
perspective essential for navigating contemporary economic uncertainties.